Millennials have been coming into homeownership noticeably later than previous generations, but why? Up to this point, the reasoning behind low millennial homeownership has been mostly speculation. Although some reasons are plausible, like student debt and delayed marriage, there is not much hard data to reinforce them.

Now, a new report from the Urban Institute shows the data on why millennials are delaying homeownership. The report looks at different factors that held back millennials and shows concrete data to explain exactly how much those factors delayed homeownership.

Key Takeaways

Marriage increases the rate of homeownership by 18%, and millennials are choosing to wait

White households have the highest rate of homeownership, and millennials are more racially diverse than previous generations

A 1% increase in student debt decreases the likelihood of homeownership by 0.15%

Excerpt

The Urban Institute released a study that shows the actual data behind these factors, revealing what is really holding Millennials back.

The generation’s homeownership rate was 37% in 2015, about 8 percentage points lower than the rate of Gen Xers and Baby Boomers when they were ages 25 to 34.

Here are five factors that Urban Institute found have kept Millennials out of the home-buying market longer than previous generations:

1. Delayed marriage: Yes, delaying family formation is, in fact, a hindrance to homeownership. As it turns out, being married increases the probability of owning a home by a full 18 percentage points, after accounting for other factors such as age, income, race/ethnicity and education. If the marriage rate in 2015 had been the same as it was in 1990, the Millennial homeownership rate would be about five percentage points higher.

2. Greater racial diversity: White households have the highest homeownership rate by-far, therefore the increasing diversity within the Millennial population also contributes to the lower homeownership rate. If the racial composition remained the same in 2015 as it was in 1990, the Millennial homeownership rate would be 2.6 percentage points higher.

3. Increased education debt: Student debt has been a growing problem, and could even be turning into a crisis. But how much does it affect homeownership rates? The Urban Institute’s data shows a 1% increase in student debt decreases the likelihood of owning a home by 0.15 percentage points.

4. Increased rents: Nationwide, rent just jumped to a new all-time high, surpassing an average $1,400 per month. And now, data shows that a 1% increase in a household’s rent-to-income ratio decreases the likelihood of homeownership by 0.07 percentage points.

5. Delayed child bearing: Not only are Millennials taking longer to get married, but they are also spending more time before having children. For those who are married, having a child increases the probability of owning a home by 6.2 percentage points.